IDREAMSKY (01119) Yingxi: It is expected that the company will reverse its loss and achieve profitability in the first half of 2025, with stable operating cash flow.

On the evening of July 17, IDREAMSKY (01119) announced that it expects a net profit of approximately RMB 20-50 million for the first half of 2025 (for the six months ending June 30, 2025), turning a loss into profit. This is mainly attributed to the increase in the group's profit margin brought about by the launch of self-developed products and new products. The group expects a net cash inflow from operating activities of approximately RMB 30-60 million for the first half of 2025, with the company's operating cash flow remaining steady. It is understood that the main reason for the profit growth of IDREAMSKY this time is the "realization period" of the early-stage strategic adjustment. In 2024, the self-developed product "Karyapiku" was still in the R&D investment phase, and the PC version overseas was launched at the end of the year, so the gross profit of the overseas and domestic PC versions in 2024 was not enough to cover the entire product (including PC, mobile, and console) R&D investment. In 2025, "Karyapiku" will gradually start to deliver business performance. In addition, in the second half of 2025, IDREAMSKY will usher in a period of intensive product launches. Currently, the global version of the "Karyapiku" mobile game is in the critical testing phase before launch, with good retention performance of early test users, exceeding expectations in terms of theme attraction, and currently in the stage of payment testing. After the payment testing is completed, the mobile game product will gradually start the global launch process, which is expected to bring significant growth to the company's revenue, profit, and cash flow. At the same time, the company also has multiple overseas premium games such as "Clash of Clans" and "Garden Story" set to be released online, laying a solid foundation for further performance growth. Industry insiders point out that with the multi-platform launch of "Karyapiku" and the intensive release of overseas premium games, the company's performance is expected to enter an accelerated growth period, further consolidating its global competitiveness.